medium · CFA Level I Alternative Investments
Lumen Credit Fund utilizes a 1.5% management fee (paid on beginning-of-year AUM) and a 20% incentive fee with a High-Water Mark (HWM). No hurdle rate is applicable. An investor's initial stake is 10,000,000. Year 1 gross return is -10%. Year 2 gross return is +15%.
The investor's net return for Year 1 is closest to:
- -10.0%
- -11.3%
- -11.5%
Sign up free to see the explanation and track your rank →
More CFA Level I Alternative Investments practice
- Which of the following is *not* typically considered one of the three primary levers of…
- A private equity fund managed by Oakridge Capital uses an American waterfall structure…
- A private equity fund is being liquidated. The General Partner (GP) is required to return…
- If the fund's gross return is 4%, what is the performance fee?
- What is 'Carried Interest' in the context of a private equity fund?
- A fund manager at Kestrel Grid is currently 'under water.' This most likely implies that:
- If the fund gains 15% in the following period, on what portion of the gain can the…
- The management fee for Year 2 is calculated on:
All Alternative Investments questions · CFA Level I study guide · CFA Level I glossary · CFA Level I flashcards